HiFi Blog: digital audio goodness

The WSJ reports [via] that Amazon.com could be entering the music subscription services arena as soon as this summer—according to the paper, they’re in advanced talks with the major labels (EMI, Sony BMG, Universal, Warner). I was stunned to read that the company has already hired a staggering 3000 (that’s: three thousand) employees to work on digital music initiatives this past year.

A couple of reasons why this initiative differs from the likes of Rhapsody, Napster, etc:

• Amazon-branded music players: to lure customers to its music subscription service, Amazon will discount these proportionally to the length of the subscription—e.g. get a year’s worth of service, and that 2GB MP3 player is yours for free. In what concerns the devices, I believe the two best candidates for manufacturing at the moment are the venerable Creative Labs and the latecomer to the MP3 frenzy, SanDisk. Creative is not new to this process—Dell’s offerings are (or rather, were) rebranded Creative ones, and we all know their hardware is solid. And SanDisk? They seem to have entered the MP3 player arena with a considerable amount of enthusiasm, and the latest market figures give them something to hope about—they’ve sold 1M players during the holiday quarter, second only to Apple (by 13M, but we know Jobs is in another league). If their executives’ statements are to be taken seriously (VP at CES: “Ultimately, we would like to make this a two horse race, and reach 35-40 percent market share.”) they have every reason to pursue the Amazon deal vigorously. Plus, they don’t seem to mind these cross-promotions/deep discounts at all—remember their recent deal with Rhapsody with regards to the m200. To help things more, they own a considerable chunk of the increasingly important flash-based market (29%). Right—did I say that my bet is on SanDisk? I’m confident they’ve got something good in their hands with their latest offerings (c100/e200), as they were presented in this year’s CES—esp. the Nano-targeted e200 series, if discounted by Amazon, would be particularly tempting.


• they know what you like: the biggest e-tailer in the universe knows which CDs which you’ve bought, knows which ones you like or hate -if you’ve taken the time to rate them- and can automagically recommend new ones for you to spend your hard-earned cash on. Now, apply this knowledge to the music subscription service—you have a service that knows your tastes right from the beginning (no effort needed to personalize your recommendations! you’ve been doing so all this time!), and to further lure you to buy that Amazon-branded MP3 player they’ll be giving it to you with a selection of tunes preloaded to suit your tastes.


• further incentives: now what if discounted CDs are offered to subscribers? (According to the WSJ, Amazon is considering this.) What if, the moment you bought a CD, Amazon automatically gave you the opportunity to download (rip/mix/burn) its contents to your computer? As you can tell, there are a number of ways they can play the incentives game based on their CD inventory.

The irony is that despite all that, the service may never take off like the optimists in the major labels hope, because after all, it doesn’t work with the #1 music player out there; but it doesn’t hurt trying and another solid entry in the music subscriptions market is good for the competition.

Side-stat: Amazon sells 10% of all the digital music players in the US.